New listings boost VFEX market capitalisation
NEW listings on the Victoria Falls Stock Exchange (VFEX) in the first half of the year have boosted the bourse market capitalisation to US$1,29 billion compared to US$424,83 million recorded in December 2022.
This represents a 202,51 percent increase.
From its inception in 2020, VFEX has experienced a positive momentum which has seen 14 listings with some migrating from the Zimbabwe Stock Exchange (ZSE).
Listed entities cut across mining, property, banking and hospitality sectors.
The bourse is a subsidiary of the ZSE established to kick start the Offshore Financial Services Centre (OFSC) earmarked for the special economic zone in Victoria Falls.
It is part of efforts to attract global capital and restore foreign investor confidence in Zimbabwe’s capital markets and help companies raise capital in foreign currency.
This year, the bourse has experienced rapid growth and managed to attract migrations which include Innscor Africa Limited, Axia Corporation Limited, First Capital Bank, Zimplow, African Sun Limited while West Properties became VFEX’s first initial public offering.
Market watchers believe more migrations will take place this year.
Dr John Mangudya
In his Mid-Term Monetary Policy Review Statement issued on Wednesday last week for the period ended 30 June, Reserve Bank of Zimbabwe (RBZ) Governor, Dr John Mangudya n Mansaid despite the bearish sentiments that characterised the VFEX during the first half of 2023, market capitalisation rose by 202,51 percent to US$1,29 billion, compared to US$424,83 million recorded in December 2022.
“The increase in VFEX capitalisation was largely attributed to a notable number of new listings, beginning in the year 2023. This culminated in an increase in the number of outstanding issued shares on the VFEX market,” he said.
VFEX has become a critical component of Zimbabwe’s ongoing efforts to revitalise its capital markets and attract global investment by providing a platform that caters to foreign investors and offers stability in a hard currency ecosystem, the exchange is stimulating economic growth and fostering a supportive investment environment.
The Government has committed that the VFEX will remain a foreign exchange market in line with Vision 2030, which requires a lot of foreign investment as the country needs a vehicle that will make it attractive to foreign investors hence the VFEX, which has tax benefits.
In the period under review, Dr Mangudya said the Zimbabwe Stock Exchange (ZSE) was largely characterized by high speculative tendencies as investors sought safe havens in some selected stocks with strong balance sheets, in line with limited investment options on the money market.
Zimbabwe Stock Exchange
Consequently, all the major indices registered gains, with the ZSE All Share, Top 10, Medium Cap and Small Cap indices adding 779,30 percent, 655,69 percent, 1 090,87 percent and 322,81 percent to close at 171 408,90 points, 93 034,57 points, 436 363,92 points and 1 911 327,14 points, from 19 493,85 points, 12 311,13 points, 36 642.44 points and 452 056,95 points recorded as at end of December 2022, respectively.
“ In the same vein, the resource index increased by 106 percent to close at 76 960,49 points, compared to 25 487,77 points recorded as at the end of 2022. On a year-on-year basis, the ZSE All Share, Top 10 and Mining Indices gained 766,05 percent, 658 percent and 284,39 percent, from 19 791,94 points, 12 273,75 points and 20 021,24 points recorded in June 2022, respectively,” he said.-chronicle
